MOSCOW — Microsoft is vastly expanding its efforts to prevent governments from using software piracy inquiries as a pretext to suppress dissent. It plans to provide free software licenses to more than 500,000 advocacy groups, independent media outlets and other nonprofit organizations in 12 countries with tightly controlled governments, including Russia and China.

With the new program in place, authorities in these countries would have no legal basis for accusing these groups of installing pirated Microsoft software.

Microsoft began overhauling its antipiracy policy after The New York Times reported last month that private lawyers retained by the company had often supported law enforcement officials in Russia in crackdowns on outspoken advocacy groups and opposition newspapers.

At first, Microsoft responded to the article by apologizing and saying it would focus on protecting these organizations in Russia from such inquiries.

But it is extending the program to other countries: eight former Soviet republics — Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan — as well as China, Malaysia and Vietnam. Microsoft executives said they would consider adding more.

“We clearly have a very strong interest in ensuring that any antipiracy activities are being done for the purpose of reducing illegal piracy, and not for other purposes,” said Nancy J. Anderson, a deputy general counsel and vice president at Microsoft. “Under the terms of our new nongovernmental organization software license, we will definitely not have any claims and not pursue any claims against nongovernmental organizations.”

Software piracy inquiries against advocacy groups and media outlets in other former Soviet republics are less common than in Russia, but they have occurred. This year, the police in Kyrgyzstan raided an independent television station, and its employees said a lawyer retained by Microsoft had played a role.

In China, experts said they were not aware of many cases. They pointed out that if the security services wanted to hound or close advocacy groups, they had many other ways of doing so.

But China has been a minefield for American technology companies, including Microsoft, Yahoo and Google, which have grappled with the country’s Internet censorship, and it appears that Microsoft is hoping to avoid new controversies there.

Microsoft’s offer “will surely promote the health of nongovernmental organizations in China,” said Lu Fei, director of a clearinghouse for these groups.

Software piracy is widespread in the 12 countries covered by the new program, and Microsoft has long urged their governments to curb the practice. But in Russia, the company discovered that the authorities used the intellectual property laws against dissenters no fax payday advances.

The security services in Russia have confiscated computers from dozens of advocacy organizations in recent years under the guise of antipiracy inquiries. Some of these groups did have illegal software, and the authorities have said they are carrying out legitimate efforts to curtail software piracy. But they almost never investigate organizations allied with the government.

Microsoft had long rejected requests from human-rights groups that it refrain from taking part in such cases, saying it was merely complying with Russian law.

But now, the organizations would be automatically granted the software licenses without even having to apply for them, meaning that any programs that they possessed would effectively be legalized. That essentially bars the company’s lawyers from assisting the police in piracy inquiries against the groups.

Ms. Anderson of Microsoft said the company was trying to quickly prepare the automatic licenses for the 12 countries, a process that includes translating them, ensuring that they comply with local laws and disseminating them to the authorities.

Microsoft already provides actual copies of software free to some nonprofit groups. It said that in its last fiscal year, it gave out half a billion dollars worth of programs in more than 100 countries. But it has also found that this policy is not well known in some countries.

In Russia, nonprofit groups said they had already noticed a striking change in Microsoft’s attitude toward these piracy cases. In one notorious inquiry, plainclothes police officers raided a group in Siberia, Baikal Environmental Wave, and seized its computers in January.

Baikal Wave’s leaders said they had used only licensed software, but they were unable to gain any help from Microsoft.

The case was a focus of the article last month in The Times. After it was published, Microsoft gave Baikal Wave free updated versions of software for all its computers and asked the police to drop the inquiry.

The police have not yet formally done so, but Baikal Wave said it was pleased with Microsoft’s reaction and the new program of automatic software licenses.

“The security services will now know that they will not be able to harass nonprofit and human rights organizations and take their computers,” said Galina Kulebyakina, a co-chairwoman of Baikal Wave. “It is outrageous what they did, and now that will no longer happen to others.”

Jing Zhang contributed research from Beijing.

Microsoft Expands Effort to Protect Nonprofits

ROME (AFP) – Italian Prime Minister Silvio Berlusconi laughed off a new investigation against him and his son for tax evasion linked to his Mediaset media empire, Italian newspapers reported on Saturday.

"It makes me laugh except that my son has been dragged into it," Berlusconi, 74, who is recovering in his luxury villa in Sardinia after an operation on his left hand, was quoted by La Repubblica daily as saying.

Il Giornale, which belongs to the Berlusconi family, quoted the prime minister as saying that the inquiry was "entirely predictable."

"I&&9;m used to it," Berlusconi was quoted as saying payday lenders.

Berlusconi and his son have been summoned for questioning on October 26 on allegations related to Mediaset&&9;s tax declarations for 2003 and 2004 as part of a wider inquiry against the company, judicial sources said on Friday.

Mediaset has already firmly rejected the accusations as "absurdity."

Mediaset was founded by Berlusconi in the 1970s and is now run by his family. It includes Italy&&9;s three main private national television channels.

Berlusconi laughs off tax fraud inquiry

The nation&&9;s leaders are always working with conflict. They are either in a conflict, entering a conflict, or coming out of a conflict.

Most recently, the crisis involves the shoddy paperwork in the foreclosure process. That lack of detail violated the rights of those being evicted. But who is the real loser?

It is the evictee? It probably would be if they were improperly foreclosed upon. But of the homes being taken over by banks, most mortgage holders haven&&9;t made payments in more than 18 months.

[See Is Your Portfolio Ready for a Double-Dip Recession?]

Is it the new purchaser? It could be. The new buyer likely put money down and is simply waiting for the paperwork to be settled so he or she can move in or rent the property. What happens to those funds and/or where will he live?

What about the banks? They are still servicing the mortgage instruments that are backing the bad loans and now they can&&9;t even get the collateral that was pledged against the loan to begin with. Furthermore, if they do have a buyer, they are a stone&&9;s throw away from getting that real estate off the books. Banks don&&9;t want to hold real estate.

How about the mortgage servicers? Technically, it was their job to file the paperwork properly, and if they did not, should they have to do it again? Redoing the paperwork costs money through payroll and time.

How about the regulators? They&&9;ll have to work evenings and weekends to solve this issue as soon as possible. Of course they&&9;re getting the blame for not providing the oversight.

What about our government, state or federal? They will have to work extended hours to find out who is to blame. They will also have to come up with new regulations to keep their voters safe from future issues.

Finally, what about homeowners/tax payers? They&&9;ve been doing a good job of paying their mortgage on time, but with every foreclosure in their neighborhood, the value of their home continues to drop and with this moratorium, that will continue overnight pay day loans.

Homeowners and taxpayers will ultimately pay the price of higher fees and taxes. There will be a cost from the evictee being left on the street. There will be a cost because the new buyer will file suit against the bank for not honoring their contracts. There will be a cost for consumers as banks charge higher fees to cover the bad debt on their books. There will be a cost for mortgage servicers who must still make profits amid recreating paperwork. There will be a regulatory cost as new rules making the mortgage markets move slowly. There will be the cost of higher taxes the state and federal government will charge for witch hunts, for new processes, and for bailing out those involved with this conflict. As a matter of fact, the real cost could eventually include another government bailout.

The next time you are completing a document, make sure you read over everything and dot all the i&&9;s and cross all the t&&9;s before you sign it. It will ultimately help everyone.

Kelly Campbell, Certified Financial Planner and Accredited Investment Fiduciary, is founder of Campbell Wealth Management, A Registered Investment Advisor in Fairfax, Va. Campbell is also the author of Fire Your Broker, a controversial look at the broker industry written as an empathetic response to the trials and tribulations that many investors have faced as the stock market cratered and their advisors abandoned their responsibilities to help them weather the storm.

Who Loses in a Foreclosure Moratorium?

PARIS – Workers tried to shut down France on Tuesday with strikes affecting airports, public transportation, schools and the postal service in a showdown with President Nicolas Sarkozy over his government's attempt to raise the retirement age by two years to save money.

Refinery workers also walked off the job, leading one union to warn of looming gasoline shortages.

The battle over the contested retirement reform has gone on for months, but this week could prove decisive. With the Senate expected to pass the pension reform bill by the end of the week, some unions have upped the ante by declaring open-ended strikes, meaning the walkouts that begin on Tuesday could last for days or even weeks. Past walkouts lasted only one day.

Train drivers launched an open-ended strike Monday night, and the work stoppages widened to other sectors on Tuesday. High school students also were joining the fray, with walkouts expected at hundreds of schools Tuesday.

More than 200 street protests were planned throughout the country. Last month, similar demonstrations brought 1 million people onto the streets, according to police estimates, though union organizers insisted turnout was three times as high.

The left-leaning Liberation newspaper ran a headline reading "What if the strike lasted?," while the conservative Le Figaro ran a story about how strikes at French oil refineries could lead to shortages by the week's end on its front page.

Around 30 percent of flights were canceled at France's busiest airport, Paris' Charles de Gaulle, while cancellations at the capital's second airport, Orly, reached 50 percent, according to aviation authorities. Most of the affected flights were short-haul domestic flights or inter-European flights, said Eric Heraud, spokesman for France's DGAC civil aviation authority.

Even getting to the airport was a challenge Tuesday. As 1 p.m. (1100 GMT), no trains were running on the suburban RER B-line that links central Paris to both airports, according to Paris' RATP public transport authority.

Workers at all six of oil giant Total SA's French refineries were striking, and two of them had begun preparations for total shutdowns, said company spokesman Michael Crochet-Vourey.

A third Total refinery had already begun shutdown procedures on Sunday because an unrelated 2-week-long strike by port workers had blocked shipments of crude oil for processing, Crochet-Vourey said. He declined to estimate how long it would take before the strikes translated into gas shortages at the pump.

However, the CGT union said in a statement Tuesday that gasoline shortages were possible "in the very near future."

Participation in Tuesday's strikes varied by sector.

Around a fifth of elementary and high school teachers were striking — fewer than the number that took part in the last strike, on Sept. 23, the Education Ministry said.

The national railway said participation in the strike had risen to 40 percent Tuesday from 37 percent in the last round of strikes, while at the postal service the strike's impact was similar to last month, with about 17 percent of employees walking out, according to post office management. One post office union put participation at twice that level.

A union-led demonstration filled Marseille's Old Port with red flares and smoke online pay day loans.

"I think the government needs to listen to the message of the people in the streets and the workers from all the companies in our country," said metal worker Didier Musato, 53, from the CFDT union.

With service on suburban trains and the Paris Metro and bus lines slashed by about half, commuters rolled into work on bikes, rollerblades and skateboards. The French capital's free bike racks were empty as many took advantage of the brisk, sunny morning to cycle to work.

Because strikes are frequent in France, commuters have become experts at dealing with transit issues and travelers at Europe's largest train station, Paris' Gare du Nord, appeared to be taking the latest walkout in stride.

"I understand the strikers, I tolerate it," said Fuad Fazlic, 38, a tailor at French luxury label Chanel, as he rolled his ten-speed bicycle out of the Gare du Nord on his way to work. Fazlic said the strike hadn't disturbed his morning commute by train from Senlis, a town north of the capital, and with his bike to get around Paris, he wasn't worried about slowdowns on the capital's buses and subways.

Fazlic said he'd learned his lesson after massive strikes in 1995 brought much of France to a standstill for about two months. "I have been biking to work ever since," Fazlic said.

Emmanuel Difom, 40, said he'd had no trouble catching a train from the Charles de Gaulle airport to central Paris. But Difom, an accountant who'd flown in Tuesday morning from Cameroon, said he was "very worried" about making the next leg of his journey, by train to Strasbourg.

President Sarkozy's conservative allies insist there is no choice but to buckle down and accept the reform. Faced with huge budget deficits and sluggish growth, France must get its finances in better order, the insist. Even with the two-year change France would still have among the lowest retirement ages in the developed world.

Unions fear the erosion of the cherished workplace benefit, and say the cost-cutting ax is coming down too hard on workers.

Sarkozy's government is all but staking its chances for victory in presidential and legislative elections in 2012 on the pension reform, which the president has called the last major goal of his term. France's European Union partners are keeping watch, as they face their own budget cutbacks and debt woes.

The new nationwide strikes was the fifth since May, including two last month that coincided with protest marches that drew at least 1 million people into the streets.

The lower house of parliament, the National Assembly, approved the reform last month. The Senate has approved the article on raising the retirement age from 60 to 62, but is still debating the overall reform. The bill also raises the age of eligibility for a full pension from 65 to 67.

Sarkozy, in a small concession Thursday, offered to allow women born before 1956 and who had more than three children to receive full pensions at 65.

That apparently did little to stem the strike plans.

___

Associated Press writers Jean-Marie Godard and Jamey Keaten and APTN producer Sylvain Plazy in Paris contributed to this report.

France: Strikes over pension reform begin

WHEN he played the oil tycoon J. R. Ewing Jr., in “Dallas,” the long-running, ’80s-era nighttime soap opera, Larry Hagman didn’t get mad at his adversaries. He got even.

Last week, Mr. Hagman, 79, got even once again. This time it was against his broker.

A securities arbitration panel awarded Mr. Hagman and his wife Maj, 82, a big victory against Citigroup, which had overseen some of the couple’s investment accounts. The three arbitrators who heard the case ordered Citigroup to pay the Hagmans $1.1 million in compensatory damages — slightly less than the $1.345 million they had requested — as well as $439,000 in legal fees.

But the kicker was the punitive damages award in the case, which accused Citigroup’s brokerage unit, Smith Barney, of fraud, breach of fiduciary duty and failure to supervise the broker overseeing the Hagmans’ funds. The panel ordered Citigroup to pay $10 million to charities chosen by Mr. Hagman.

The award was the largest given to an individual this year, according to the Financial Industry Regulatory Authority, which oversaw the arbitration. The Hagman award was also the only one in which a panel ordered that punitive damages go to charity, Finra said.

Finra has been recording arbitration awards for 21 years, and Mr. Hagman snared the ninth-largest amount ever awarded. A spokesman for Citigroup said that “we are disappointed and disagree with the panel’s finding and we are reviewing our options.”

That suggests that Citigroup — which said in its own defense that it wasn’t responsible for the losses — might seek to overturn the award. But arbitrations are rarely reversed. Moreover, it’s hard to imagine an award destined for charitable organizations being overturned.

So here’s what happened to the Hagmans: In 2005, they moved their account from a registered investment adviser to Lisa Ann Detanna, a broker at what is now Morgan Stanley Smith Barney. (When the couple first invested with Smith Barney, Citigroup still owned it; Citigroup sold a controlling stake in the brokerage to Morgan Stanley in 2009.)

According to documents produced in the Hagmans’ case, Ms. Detanna quickly began upending the couple’s portfolio, taking it from a conservative blend of 25 percent stocks and 75 percent fixed income and cash to the opposite: 75 percent stocks and the rest cash and bonds.

Never mind that when the Hagmans first sat down with Ms. Detanna, they told her they needed income-producing investments that would preserve their principal, according to the documents.

Ms. Detanna also sold Mr. Hagman a $4 million life insurance policy that required onerous annual premium payments of $168,000.

PHILIP M. AIDIKOFF, a lawyer at Aidikoff, Uhl & Bakhtian in Los Angeles, represented the Hagmans in the case.

“Like most retail customers, Mr. Hagman trusted Morgan Stanley Smith Barney to do what they said they would do,” he said. “He told the broker that he and his wife were conservative and did not need to take any significant risk with the assets they were transferring. This knowledge of the conservative risk tolerance was confirmed over and over to my clients.”

When the market fell, Mr. Hagman’s lawyer argued, the account’s losses were far larger than they would have been had Ms. Detanna maintained the conservative portfolio. And the life insurance policy, which Mr. Hagman did not need and was therefore unsuitable according to his lawyer, generated losses of almost $437,000 when sold. The losses included an exit fee of $168,610, which Citigroup extracted when Mr. Hagman sold the policy.

Mr. Hagman, who recently returned from Europe, where he made personal appearances for “Dallas” fans, said he was surprised by the award but felt it was justified. “I hire people to take care of these things for me,” he said in an interview. “I felt a little bit taken advantage of.”

Documents produced in the case by Morgan Stanley Smith Barney confirmed that the firm had been advised repeatedly of the conservative nature of the Hagmans’ investment preferences no fax cash advances. The firm also produced materials indicating that a portfolio mix dominated by equities, as the Hagmans’ portfolio was, does not qualify as conservative.

Nevertheless, Ms. Detanna piled the couple into stocks.

Much back and forth in the case focused on whether Don T. Davis, her manager in a Beverly Hills office, failed to supervise her properly. A broker who generates significant commissions for her firm, Ms. Detanna was named in June by Barron’s as one of the top 100 Women Financial Advisers in America.

A spokeswoman for the firm said that neither Mr. Davis nor Ms. Detanna would comment for this article and noted that the problems occurred when Citigroup controlled Smith Barney.

“The investment activity that was the subject of this arbitration occurred before Morgan Stanley Smith Barney came into existence,” she said.

A look at Ms. Detanna’s full regulatory record, however, shows nine customer complaints in addition to Mr. Hagman’s between 2000 and 2010. Of these 10 complaints, four resulted in awards or settlements, four were dismissed, one was withdrawn and one is pending. Regardless of their disposition, the sheer number of complaints should have raised flags for Ms. Detanna’s manager if he had followed his firm’s compliance rules, Mr. Aidikoff told the arbitrators.

Mr. Davis’s branch office manager compliance handbook, dated June 2006, states that a broker may require special supervision “if he/she has received three or more complaints and/or arbitrations in a rolling 12-month period or two complaints/arbitrations in a rolling six-month period.”

But in testimony during the arbitration, Mr. Davis conceded that he had never placed Ms. Detanna under increased supervision, even though her record indicated four complaints within a 12-month period in 2002 and 2003.

Notices to member firms published by Finra over the years also warned that managers should increase their oversight of brokers who are subjects of numerous complaints. And the number of complaints on Ms. Detanna’s record makes her a rarity in an industry where a tiny fraction of brokers receive even five. Mr. Aidikoff said he had never seen a compliance history as riddled with complaints as that of Ms. Detanna.

Such complaints are recorded in a C.R.D., or central registration depository. The arbitration panel overseeing the Hagman matter rejected Citigroup’s request that the decision in the actor’s case be removed from Ms. Detanna’s regulatory record.

Of course, there’s an obvious reason that some branch managers prefer not to admonish their big producers: They receive a portion of the hefty commissions that star brokers generate. Mr. Davis, the manager charged with overseeing Ms. Detanna, had such an arrangement, Mr. Aidikoff said.

Mr. Hagman said he was not sure which charities he’d designate as recipients of the $10 million award. Because his wife has Alzheimer’s, he said he would earmark some money to those working on a cure. “It’s an opportunity to do some good,” he said.

Mr. Aidikoff said he thought the unusual award reflected the panel’s view that the firm “refused to accept that broker supervision is really at the heart of the retail stock market.

“The message the panel is sending is, ‘You guys have to take your supervisory obligations seriously,’ ” he added. “And the only way to remind them of how important this is, is to hit them over with a punitive damage award.”

Or, as Mr. Hagman used to say in character on “Dallas”: “The world is littered with the bodies of people that tried to stick it to ole J. R. Ewing!”

Fair Game: It’s Not Nice to Mess With J.R.

Filed at 1:15 a.m. ET

SHANGHAI (AP) — Brazilian aircraft maker Embraer said Friday it is still discussing plans for its aircraft factory in northern China, denying reports it will close the plant.

Brazil's Estado news agency, citing Embraer's vice president of commercial aviation, Paulo Cesar de Souza e Silva, said the company planned to shut down the factory because China, in light of its own ambitions in aircraft manufacturing, viewed the Brazilian company as competitors.

"Embraer clarifies that, at the present time, no decision has been made in this respect, and that the company is negotiating with the government of China and the Chinese partner for the purpose of continuing the operations," said the statement, issued by the company, also known as Empresa Brasileira de Aeronautica SA.

Embraer makes 50-seat ERJ-145s at the factory in Harbin, Harbin Embraer Aircraft Industry Co., Ltd., a joint venture with Harbin Aircraft Industry Group that opened in 2003 no teletrack payday loan.

The Chinese government committed in 2002 to buy planes from Embraer in return for a promise by the Brazilian company to build a plant in China.

Embraer jet sales have stalled in recent years as European and U.S. airlines have cut purchases due to the financial crisis and rising fuel costs. The Harbin factory was set up to serve as a foothold for the Asian market, and especially fast-growing China.

But China is pushing ahead with plans to develop and market its own regional and large jets in a challenge to established aircraft makers.

Meanwhile, China has scaled back purchases of the ERJ-145s, and given the lack of demand, the company reportedly hopes to make larger jets at the facility.

Embraer Says Still Mulling China Factory Status

Filed at 10:04 a.m. ET on October 06, 2010

LONDON (AP) — European stock markets gave up some of their gains Wednesday after a subdued opening on Wall Street following disappointing U.S. jobs data.

Expectations that the U.S. Federal Reserve is preparing to unveil more monetary stimulus continued to hit the dollar hard, as it sank to a fresh eight-month low against the euro and a new 15-year low against the yen.

In Europe, the FTSE 100 index of leading British shares was up 42.17 points, or 0.8 percent, at 5,677.93 while Germany's DAX rose 43.17 points, or 0.7 percent, at 6,259. The CAC-40 in France was up 34.33 points, or 0.9 percent, at 3,766.26.

In the U.S., the Dow Jones industrial average was up 9.16 points, or 0.1 percent, at 10,953.88 soon after the open while the broader Standard & Poor's 500 index was less than a point to 1,160.80.

U.S. stocks had been heading for a brighter opening, following big gains on Tuesday amid mounting expectations that the Federal Reserve will introduce more monetary stimulus measures next month.

However, the monthly survey from private payrolls firm ADP stoked concerns that this coming Friday's nonfarm payrolls report for September may be worse than expected. ADP found that U.S. employers shed 39,000 jobs during September, in contrast to market expectations for a 20,000 or so increase.

"This does not augur well for nonfarm payrolls," said David Buik, markets analyst at BGC Partners.

In most months, the payrolls data often set the market tone for a week or two after their release. This time, they may be even more important than usual — most economists think that the Fed is ready to announce further measures at the beginning of next month as the figures are not expected to show the U.S. economy creating a significant amount of jobs.

Expectations of further action by the Fed underpinned Tuesday's big stock market gains around the world.

The catalyst to the rally was the Bank of Japan's surprise decision Tuesday to cut its key interest rate to a range of zero to 0.1 percent. More importantly in the context of the world economy, the bank said it was paving the way for a 5 trillion yen ($60 billion) fund to buy government bonds and other assets to prop up the faltering Japanese economy guaranteed high risk personal loans.

"What they have done has served to reinforce the belief that the Federal Reserve will soon start up the printing presses and resume asset purchases of some form or other in the next few weeks," said Michael Hewson, market analyst at CMC Markets.

All this is having a dramatic impact on the dollar.

By mid afternoon London time, the euro was up 0.3 percent on the day at $1.3873, just shy of its earlier eight-month high of $1.3884. Meanwhile, it was 0.3 percent lower at 82.92 yen, just above its earlier 15-year low of 82.77 yen.

The markets are on the lookout for another intervention by the Bank of Japan. Last month, it bought dollars when it had fallen to 82.87 yen in an attempt to stem the export-sapping appreciation of the Japanese currency.

Besides economic indicators, the quarterly earnings reporting season begins Thursday — aluminum company Alcoa Inc. is the first major company to report — a number of the world's major central banks are meeting. On Thursday, both the European Central Bank and the Bank of England meet.

In Asia, Japan's benchmark Nikkei 225 stock average closed up 1.8 percent, or 172.67 points, at 9,691.43 after surging 1.5 percent the previous day.

South Korea's Kospi rose 1.3 percent to 1,903.95. Australia's S&P/ASX 200 was up 1.7 percent at 4,686.8 and Hong Kong's Hang Seng jumped 1 percent to 22,880.41.

Markets in Malaysia, New Zealand, Singapore, Bombay and Taiwan also advanced. Financial markets in mainland China are closed through Oct. 7 for the National Day holidays.

Benchmark oil for November delivery was down 2 cents to $82.80 a barrel in electronic trading on the New York Mercantile Exchange. The contract gained $1.35 to settle at $82.82 on Tuesday.

____

Associated Press Writer Pamela Sampson in Bangkok contributed to this report.

Stocks Ease on Soft US Jobs Data as Dollar Slides

NEW YORK (Reuters) – The Dow and S&P 500 were little changed on Monday as concerns about bank profits, spurred by new Swiss capital rules, were offset by upbeat housing data, while Microsoft fell after a ratings downgrade, weighing on the Nasdaq.

Pending home sales rose more than expected in August, indicating the housing market was regaining some stability, and August factory orders fell slightly more than forecast.

Swiss regulators will require global banks UBS AG (UBS.N)(UBSN.VX) and Credit Suisse (CS.N)(CSGN.VX) to hold far more capital than their international rivals to prevent a crisis that could cripple the country. The new rules could crimp competitiveness in investment banking.

Concerns about Europe&&9;s banking system have been a headwind for U.S. stocks in recent months, even as some improving domestic data eased concerns over a possible double-dip recession. The S&P 500 recently finished its best quarter in a year, though the index has struggled to break out of the 1,130-1,150 range.

"These austerity measures are necessary, but don&&9;t have a stimulating effect on the market," said Malcolm Polley, president and chief investment officer of Stewart Capital Advisors in Indiana, Pennsylvania. "It could mean that equity returns will be muted, though not necessarily down, for quite a while instant credit report."

The Dow Jones industrial average (.DJI) was up 2.80 points, or 0.03 percent, at 10,832.48. The Standard & Poor&&9;s 500 Index (.SPX) was down 1.78 points, or 0.16 percent, at 1,144.46. The Nasdaq Composite Index (.IXIC) was down 8.74 points, or 0.37 percent, at 2,362.01.

Microsoft Corp (MSFT.O) was the top percentage loser on the Dow, falling 2.1 percent to &&6;23.87 after Goldman Sachs downgraded the stock to "neutral," citing competition from tablet computers.

Actel Corp (ACTL.O) surged 31 percent to &&6;20.92 after chipmaker Microsemi Corp (MSCC.O) said it would buy its smaller rival.

GTSI Corp (GTSI.O) tumbled 41 percent to &&6;4.30 after Eyak Technology withdrew a buyout offer.

This week marks the unofficial start of the third-quarter earnings season, with Alcoa Inc (AA.N) due to report on Thursday. Micron Technology Inc (MU.O), PepsiCo Inc (PEP.N) and Monsanto Co (MON.N) are all set to report this week.

(Editing by Jeffrey Benkoe)

S&P flat after data; Microsoft weighs on Nasdaq

Bank of America is halting foreclosures in 23 states as it examines whether it rushed the process for thousands of homeowners without reading the documents.

The move adds the nation's biggest bank to a growing list of mortgage companies whose employees signed documents in foreclosure cases without verifying the information in them.

In some states, lenders can foreclose quickly on delinquent mortgage borrowers. By contrast, the 23 states in which Bank of America is delaying foreclosures use a lengthy court process. They require documents to verify information on the mortgage, including who owns it.

Those 23 states are:

&S226; Connecticut

&S226; Delaware

&S226; Florida

&S226; Hawaii

&S226; Illinois

&S226; Indiana

&S226; Iowa

&S226; Kansas

&S226; Kentucky

&S226; Louisiana

&S226; Maine

&S226; Nebraska

&S226; New Jersey

&S226; New Mexico

&S226; New York

&S226; North Dakota

&S226; Ohio

&S226; Oklahoma

&S226; Pennsylvania

&S226; South Carolina

&S226; South Dakota

&S226; Vermont

&S226; Wisconsin

At a Glance: Foreclosure delays in 23 states

DUBLIN – Finance Minister Brian Lenihan says Ireland will take majority control of Allied Irish Banks and pump billions more into two smaller Irish banks, Anglo Irish and Irish Nationwide.

Lenihan said Thursday Ireland would give euro3 billion more to Allied Irish, and euro2.7 billion to another nationalized bank, Irish Nationwide.

Lenihan warned Ireland faces even tougher spending cuts to rein in a deficit expected to surge beyond a staggering 30 percent of GDP this year.

Lenihan spoke after the Central Bank announced its estimate for the total cost of bailing out Anglo: euro29 paydayloans.3 billion ($39.88 billion). Ireland already has committed euro22.9 billion. The Central Bank warned that, in a worst-case scenario, the Anglo bailout bill could top euro34 billion.

Allied Irish shares fell 20 percent in early trading.

Ireland to pump billions more into debt-hit banks

HONG KONG (MarketWatch) — The war for control of Gome Electrical Appliances Holding Ltd. approached its final battle Tuesday, as shareholders prepared to chose between the wishes of its jailed founder and dominant shareholder Huang Guangyu, or those of its second-largest shareholder, U.S. private-equity firm Bain Capital.

Shareholders of China’s second largest retailer were slated to cast ballots on a number of resolutions proposed by Huang, including the ouster of incumbent Chairman Chen Xiao and Vice President Sun Yi Ding, both of whom are backed by Bain Capital.

Huang is seeking to install two alternative candidates to the 11-seat board who are more sympathetic to his interests. Among those backed by Huang for the board seats is his sister, Huang Yan Hong.

Two seats on the board were up for grabs after Huang, once known as China’s richest man, and his wife, were forced to step down while under investigation for financial crimes cash advance to savings account.

Huang also wants to change the company’s general mandate to prevent the issuance of new shares that would further dilute his holdings.

Earlier this month, Bain Capital increased its stake in Gome to 10% by converting bonds into equity, diluting Huang’s stake to 32.47% from 36%.

Gome’s shares were up 2.1% at the midday trading break Tuesday in Hong Kong.

Gome’s existing company mandate permits issuance of new stock equivalent to 20% of shares outstanding.

The special meeting was scheduled to begin mid-afternoon, with results of the vote likely to be released later in the evening.

Boardroom war for China’s Gome enters endgame

ONNAING, France (AFP) – Japanese carmaker Toyota will invest 53 million euros (71 million dollars) to produce a new hybrid vehicle at its plant in France, a decision welcomed Saturday by government and unions.

Production will begin in 2012 at Toyota&&9;s Onnaing plant near the northern city of Valenciennes and will safeguard around 3,000 jobs.

The new vehicle will be a compact hybrid but the company would not provide any further details following its announcement on Friday.

Onnaing, where the Yaris compact is manufactured, was chosen ahead of facilities in Britain, Turkey and Japan.

"The decision to produce the future hybrid at this plant confirms its position in the Toyota system," said Makoto Sano, the director of the plant, during a news conference business cards design.

The decision to locate production at Onnaing, which is currently operating at 60 percent capacity, was welcomed by government and unions.

"This is great news for jobs," said Valerie Letard, a government minister and head of the Valenciennes region, which will provide 3.75 million euros of Toyota&&9;s total investment.

"Obviously we are very happy. With the fall in production, we feared a redundancy programme," Maryline Dumoulin of the CFDT union told AFP.

Toyota to produce new compact hybrid in France

Filed at 7:44 a.m. ET

LONDON/NEW YORK (Reuters) - Banks are more willing to lend for big takeovers by companies such as BHP Billiton Ltd, Sanofi-Aventis SA and CVC Capital Partners, and with borrowing cheap, would-be buyers are seizing the chance.

This means that sensible deals that were ruled out because financing was too scarce or costly may now return to the agenda, even if they run into the tens of billions of dollars.

"For good credits with strong relationships, $30 billion-plus size deals are quite possible," said Ray Doody, head of acquisition and leveraged finance for Europe, the Middle East and Africa (EMEA) at JPMorgan.

Preliminary Thomson Reuters data released on Friday showed global mergers and acquisitions (M&A) up 21.2 percent this year to $1.68 trillion. The quarter is the largest by value in the two years since Lehman Brothers collapsed.

JPMorgan Chase and Co, the year's second-busiest arranger of loans, is one of five underwriters for the $45 billion of loans supporting BHP Billiton's bid for Potash Corporation of Saskatchewan Inc.

The Anglo-Australian miner, led by Marius Kloppers, is paying premiums over benchmark lending rates that are roughly half those paid by the similarly credit-worthy RWE AG when the German utility took out a 9 billion euro ($11.96 billion) loan to buy Dutch peer Essent NV last year.

"MORE AMBITIOUS"

That matches a wider rally. Thomson Reuters Loan Pricing Corp data show borrowers with solid A credit ratings paid about 71.7 basis points over interbank rates this quarter, against 143.3 bps a year ago.

In the year to September 10, borrowers agreed syndicated loans worth $1.25 trillion, while riskier "leveraged" loan volume rose 51 percent to $383 billion, LPC data show.

Bankers say one explanation is that recapitalized banks competing harder to win lending business and the lucrative follow-on work it often produces.

Paul Staples, London-based head of corporate finance at BNP Paribas SA, this year's busiest bank for EMEA loans, said acquisition finance had grown "progressively more accessible" in 2010.

"Corporate clients have shown a keener appetite to pursue more ambitious deals and banks have become more competitive in their desire to support them," he said.

"CHEAP DEBT"

Leaner premiums to borrow are only part of the picture.

Low official interest rates and the huge sums injected into the financial system to stave off disaster, mean the benchmark rates over which deals are priced are also rock-bottom, leading to very low all-in borrowing costs payday loan lenders.

The dollar LIBOR rate, for example, shows banks are lending each other dollars for three months at less than 0.3 percent.

French drugmaker Sanofi is one company benefiting from what Chief Executive Chris Viehbacher terms "cheap debt" -- provided in this case by BNP, JPMorgan and Societe Generale to back his $18.5 billion approach to Genzyme Corp, the U.S. rare-disease specialist.

"The fact that big corporations today can borrow money pretty cheaply means that a lot of deals that wouldn't have been accretive in the past actually are now suddenly accretive," to earnings, he recently told investors in London.

BIGGER BUYOUTS

Conditions are also easing in the "leveraged" market for riskier deals -- those that lack investment-grade ratings and often stem from private equity buyouts.

That has been aided by a rally in the market for high-yield, or "junk," bonds.

This year has already seen a record amount of new issues, approaching $200 billion, and Merrill Lynch's global high-yield index shows investors have enjoyed annual returns above 20 percent.

That rally leaves would-be buyers less reliant on banks, which remain cautious about committing big amounts, sometimes for years, to riskier borrowers.

When CVC spent 3.3 billion francs ($3.3 billion) last week to buy Sunrise, a Swiss telephone company, the deal was backed by 2.545 billion francs of debt, and unusually for such a deal, more than 60 percent of that was bond financing.

On both sides of the Atlantic, banks and private equity funds are eyeing deals that could top $5 billion.

TPG Capital LP and Silver Lake Partners recently talked about buying Seagate Technology Plc, a $5 billion hard-drive maker, a source familiar with the situation said, although the talks faltered over valuation.

Europe could soon accommodate a deal worth more than 5 billion euros, allowing for a big equity investment.

"For a new leveraged buyout in Europe, with the right type of assets, you could raise 3 to 4 billion euros of debt," said Doody at JPMorgan. "As deal size increases, the proportion coming from the bond market -- rather than the loan market -- will increase."

($1=.7523 euro)

($1=.9976 Swiss Franc)

BHP, Sanofi, CVC Show Financing Revival Aids M&A

Filed at 10:15 a.m. ET

WASHINGTON (Reuters) - Herb Allison, Treasury Assistant Secretary for Financial Stability, is stepping down as the department's top official overseeing the Troubled Asset Relief Program.

In an email to his colleagues that Treasury made available, Allison said he intends to return to Connecticut now that the bailout program is winding down.

The chief counsel for the financial stability office, Tim Massad, will take over as acting assistant secretary on September 30.

"With the TARP program entering a new phase and continuing to wind down, I have decided that now it is the right time for me to step down," Allison said in the email. "I will be returning to Connecticut to be with my wife, Simin, who could not join me here during the two years I have worked in Washington."

Allison, a former president of Merrill Lynch, headed government-sponsored enterprise Fannie Mae before over the Treasury post and prior to that was chief executive for the major teachers' pension fund, TIAA-CREF humidifier.

The TARP program, started under the former George W. Bush administration, injected tens of billions of dollars into banks and other financial institutions at the height of the financial crisis in 2008.

Though never a popular program, it is credited with helping stabilize the financial system and many recipients have now repaid the bailout money they received.

(Reporting by Glenn Somerville; Editing by Padraic Cassidy)

Treasury's Allison Stepping Down as TARP Overseer

Filed at 5:35 a.m. ET

BANGALORE (Reuters) - Clorox Co, the maker of household cleaning products, is close to selling its auto-care business to private equity firm Avista Capital Partners for $750-$800 million, Bloomberg said.

The sale of STP and Armor All auto-care brands may be announced in the coming days, the agency said, citing two people with knowledge of the matter.

Clorox spokesman Dan Staublin declined to comment to the agency. Staublin told the agency that Clorox will make an announcement if and when it reaches an agreement on the auto-care business best air conditioners.

Clorox and Avista could not immediately be reached for comment by Reuters outside regular U.S. business hours.

The deal is not finalized and may be delayed or fall through in the final stages, the people told the agency.

(Reporting by Mansi Dutta in Bangalore; Editing by Louise Heavens)

Clorox May Sell Automotive Care Business: Report